There has been something nagging at me and it was somewhat confirmed earlier this month when I saw this article on the front page of the Courier-Journal's business section. Become a Complete Fool
If you drive around my town, it's not hard to figure out that while we are in a slow-moving economy (no major job-losses or job-gains either) and gas prices have never been higher, the car lots continue to grow at a seemingly exponential rate. Every time I see a "Coming Soon Joe Blow Chevrolet" sign, I wonder "how are people buying these cars?"
The answer that I keep coming up with: "They finance them."
Why should I care? I don't plan on financing my next car and I certainly don't plan on buying a new one. But it does concern me. I am convinced that all of this financing is going to make ME pay more for a car when the time comes to buy one. Not to mention, but as cars get more expensive damage repairs go up and that's why I keep paying more for auto insurance.
I would not feel this way if I thought that gas prices were slowing people down. They are not. What makes this decade's gas jump different from the one in the seventies? More people are borrowing. It doesn't cost more at the pump to charge gas like it did then. No instant pain.
Debt is the true opiate of a consuming mass.
It makes me so angry when I see people so willing to turn their future earnings over to banks and finance companies. Okay, maybe you can make the argument that all this consuming creates jobs. But, to what ends? What will people do when they can't borrow anymore? Take out reverse-mortgages on their homes? Will the bank end up having first dibs on any viable vital organs when the end has come?
Not only does debt make things more expensive, but as I see it day to day, it seems to devalue goods or services that I receive. A week or so ago I went to the latest chain restaurant to open in our area called Cheddar's. It was a forty-five minute wait (would not have waited but we were eating with a group that was dying to eat there) and honestly it was less than mediocre in both food and service. I got to thinking, where were all these cheesy chains (pun fully intended) 15 to 20 years ago before the average household consumer debt had not sky-rocketed to nearly five figures? Now, even Mickey D's takes plastic.
From the merchant side, I am guilty taking advantage of this debt mentality as well. Every once in a while, somebody comes in and thinks that they will get a great deal if they flash cash around; but I am not impressed. I know that as soon as he leaves, that someone is likely to come in and buy two to three times as much and just slap it down on VISA. I'm even considering pushing leasing programs. I have to be competitive.
The only reason that I am airing this out is, by example of the above link, the mainstream media is either too stupid or corrupt to say this stuff. How do you report such grim views about financing when 30% to 40% of your pages or airtime are devoted to ads from car dealers and realtors?
Thanks for listening. All of these ideas are based on just what I see from day to day. I don't have any stats or reports. Maybe someone can find something that makes me feel better.
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There has been something nagging at me and it was somewhat confirmed earlier this month when I saw this article on the front page of the Courier-Journal's business section.